Monday, November 10, 2008

Monday Morning Musings

The market opened on a high note this morning after news that China would implement a huge stimulus package sparked rallies in Asian markets overnight. Also, the government said it was revising the terms of the aid package to AIG, which would give them better loan terms and more time to sell assets.

China said it would use $586 billion for a fiscal stimulus package throught the end of 2010. This is the country's biggest move yet to support its slowing economy and promote the above average growth rates the country needs.

Asian markets rallied on the news, with China spiking +7.3%, Japan gaining +5.8%, and Hong Kong +3.5%. Commodities are also rallying on the news that Chinese demand could strengthen. Oil is back up above $63.50, and gold, copper, steel, and grains are also higher today.

McDonalds (MCD) continues to do well despite the economic slowdown. It posted October same-store sales in the U.S. of +5.3%, and global sales rose +8.2%.

The news isn't so good for retailer Circuit City, which filed for Chapter 11 bankruptcy. Also, Deutsche Bank downgraded General Motors (GM) to Sell and cuts its price target from $4 to $0. The firm said GM may not be able to fund its operations beyond year-end without government intervention. A sad and sorry state of affairs.

The dollar is lower vs. the Euro, and the Yen is lower as well, which is a good sign. The Yen still hasn't broken its recent uptrend, which bulls would like to see for this recent rally attempt to kick into high gear.

The 10-year yield is a bit higher at 3.80%. And the VIX is still high at 57.


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